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DECISION No

DECISION No. 13/1999/QD-TTg OF FEBRUARY 4, 1999 ON THE 1999 INVESTMENT CREDIT PLAN

THE PRIME MINISTER

Pursuant to the Law on Organization of the Government of September 30, 1992;

In order to implement the State�s 1999 investment credit plan;

At the proposals of the Minister of Planning and Investment, the Minister of Finance and the Governor of the State Bank,

DECIDES:

Article 1.- The State�s investment credit capital in 1999 shall be used mainly for loans to ensure the construction tempo of projects that have borrowed the State�s investment credit capital but have not been completed yet; projects for which investment licenses have been issued or capital has been allocated under the Prime Minister�s decision; ODA projects with part of capital being the domestic reciprocal capital and projects which should be implemented more quickly so that they can be put into production and business in 1999.

Article 2.- Lending organizations and loan capital sources for projects left with incomplete loans are stipulated as follows:

1. Lending organizations (the Vietnam Investment and Development Bank, the General Department for Investment and Development and other commercial banks lending capital under Decision No.107/1998/QD-TTg of June 11, 1998 of the Prime Minister), which have been providing loans for projects since 1998 shall continue lending capital to those projects in 1999 according to the projects� construction tempo and loan capital sources which have already been determined in investment licenses. The projects� investors shall register the loan capital amounts with the project-management agencies and the lending organizations; the project-management agencies shall report thereon to the Ministry of Planning and Investment. The investors shall be accountable for the investment efficiency and loan repayment on schedule; the lending organizations shall take responsibility for the timely provision of capital according to the construction tempo, examine and supervise the use of loan capital for the right purposes and recover the loans fully and on schedule.

For projects left with incomplete loans, which are deemed actually inefficient and unable to pay debts, the lending organizations shall, within 45 days after receiving complete dossiers from investors, notify in writing the latter, the project-management agencies and the Ministry of Planning and Investment of the reasons for its refusal to provide loans. The Ministry of Planning and Investment shall have to make a report summing up suggestions on measures to handle the outstanding debts and submit it to the Prime Minister for decision.

2. Loan capital sources for projects left with incomplete loans shall be balanced with capital from the loan recovery and capital mobilized from inside and outside the country by each lending organization; in the immediate future, the Appendix attached to this Decision shall apply. The Ministry of Planning and Investment shall have to make a sum-up report on capital demands, arrange capital sources and notify each ministry, branch, locality and lending organization of the total capital amount arranged for them.

3. The loan terms, lending interest rates, loan guaranty and responsibility of the investment licensing agencies, lending organizations and investors shall comply with Decision No.52/1998/QD-TTg of March 3, 1998 of the Prime Minister.

Article 3.- For new projects, priority in 1999 shall be given to those on: production (including the planting and growing of rubber, coffee, tea, fruit trees, and planting of materials forests); processing and preservation of agricultural, forest and aquatic products; production and processing of export goods; production of import substitutes; shipbuilding, manufacture of force engines and farm machines; machines in support of electricity generation, metallurgy, large-scale fertilizer and cement production; medical and educational instruments and equipment; production and/or business projects in difficult areas as defined by the Law on Domestic Investment Promotion and a number of infrastructure construction projects on communication, industrial parks and urban centers.

Projects borrowing investment capital must be implemented efficiently, capable of repaying debts and strictly comply with investment and construction procedures. For investment project approved after March 31, 1999, the competent agencies shall issue investment licenses only after obtaining the lending organizations� written certification of the projects� investment efficiency, debt-payment capability as well as the availability of the loan capital sources. Group-A projects shall be evaluated by the Ministry of Planning and Investment with participation of the lending organizations according to the Prime Minister�s decision. For projects with investment licenses, the lending organizations shall sign credit contracts and provide loans as well as disburse capital in strict compliance with the projects� investment tempo.

Article 4.- Capital sources, mechanism and policies for the management of loans for projects mentioned in Article 3 of this Decision:

1. Capital sources and lending organizations for Group-A projects shall be decided on a case-by case basis upon the decision of investment. The Ministry of Planning and Investment shall make an estimate of the 1999 total capital sources and lending levels as well as a list of projects and report thereon to the Prime Minister. The lending of capital for each project shall be effected according to the project�s investment license.

In the immediate future, the Ministry of Planning and Investment is assigned to sum up the lending levels for investment projects approved before April 1st, 1999 and submit it to the Prime Minister for deciding the 1999 lending levels as well as lending organizations.

2. Loan capital sources for Group B- and C- projects shall include capital mobilized from postal savings and capital mobilized by the National Investment Support Fund. In the immediate future, the Vietnam Post and Telecommunications Corporation is assigned to mobilize savings in 1999 as stipulated in the Appendix attached to this Decision and transfer the mobilized capital to the National Investment Support Fund for use as a loan capital source; the Ministry of Planning and Investment shall assign the total loan capital amount for new projects of Groups B and C to each ministry, branch and locality. Basing themselves on the notified amounts, the ministries, branches and localities shall arrange capital for each project, but must arrange enough capital according to the investment tempo as prescribed in the project�s investment license, register with the lending organizations and report thereon to the Ministry of Planning and Investment; the lending organizations shall base themselves on the investment decision and loan capital sources of the projects to sign capital-lending contract with the investors and disburse capital according to the projects� investment tempo.

3. For new projects of Groups B and C which are included in the 1999 plan and are granted investment licenses after March 31, 1999, the National Investment Support Fund shall take assume responsibility for loan provision. The Management Board of the National Investment Support Fund shall have to elaborate a regulation on the evaluation of financial plans and efficiency of projects before the competent agencies issue investment licenses.

4. The lending interest rate for new projects shall be 0.81%/month.

5. The loan term shall also cover the grace period (the construction period), depending on the production cycle and the project�s capital-retrieval time-limit, but shall not exceed 10 years; if the loan term exceed this time-limit, it must be decided by the Management Board of the National Investment Support Fund.

6. Pending the full debt payment, investors shall not be allowed to transfer, sell or mortgage the loan - related properties to borrow new capital. Investors being State enterprises shall not have to mortgage properties when borrowing capital.

Article 5.- Projects other than those entitled to investment as defined in Articles 2 and 3 of this Decision shall be considered and granted loans by the banks according to the Regulation on banking credit. The State shall adopt priority policy under the provisions of the Law on Domestic Investment Promotion and the Government�s stipulations, irrespective of economic sectors.

Article 6.- The arrangement of capital sources, the allocation of capital and provision of loans for national target programs such as the program on the planting of 5 million ha of forests, program on hunger elimination and poverty alleviation, program on clean water and environmental hygiene... and other programs on mechanical and engineering development, offshore fishing, overcoming of natural calamities... shall be effected by decisions of the Prime Minister or the competent agencies as stipulated for each program.

Article 7.- This Decision takes effect 15 days after its signing.

To set up an inter-branch group of experts to be directed by Deputy Prime Minister Nguyen Tan Dung, which shall elaborate a project on the basic renewal of the State�s investment credit mechanism and submit it to the Prime Minister in June 1999 for the implementation thereof as from the year 2000.

Article 8.- The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government and the Presidents of the People�s Committees of the provinces and centrally-run cities shall have to implement this Decision.

Prime Minister

PHAN VAN KHAI

APPENDIX

INVESTMENT CREDIT CAPITAL SOURCES FOR 1999

(Issued together with Decision No.13/1999/QD-TTg of February 4, 1999 of the Prime Minister)

I. Loan capital sources for incomplete investment projects in 1999

1. The General Department for Investment and Development

- Debt retrieval for loans: 200 billion dong

- Loans from the Social

Insurance Fund: 1,000 billion dong

- Mobilized capital: 500 billion dong

2. The Vietnam Investment and Development Bank

- Debt retrieval for loans: 400 billion dong

- Loans from the Social

Insurance Fund: 1,000 billion dong

- Mobilized capital: 1,000 billion dong

- Foreign loans: 30 million USD, equivalent to 400 billion dong

3. The Ministry of Planning and Investment shall sum up the loan amounts registered by the ministries, branches and localities; and allocate the total loan amount for each ministry, branch and locality that assumes the prime responsibility in providing loans.

II. Loan investment capital sources for new projects in 1999

The Post and Telecommunications Corporation is assigned to mobilize postal savings in 1999: 1,500 billion dong.

III. Plan on the distribution of loan capital for new projects in 1999

1. The total amount of loan capital for new projects of Group A and the amount of capital to be arranged for each project shall be estimated by the Ministry of Planning and Investment when submitting for approval investment licenses.

2. The loan capital for Group B- and C- projects shall be based on the mobilized postal savings and the Ministry of Planning and Investment shall notify each ministry, branch and locality of the total amount of capital arranged for them.-